The experts from Alegri demonstrate how SAP customers can benefit from S/4 functionality without having to migrate to S/4 just yet.[shutterstock: 531002764, Peshkova]
How can the extended functionality of S/4 be used in procurement without having to switch to S/4 Hana? How does EIM turn data into valuable information? How does the Edge approach lead to high performance in IoT projects? How can budgets for these innovations be freed up without conflicts? Alegri accompanies its customers holistically on their way into the world of S/4 Hana - neutrally and independently. The following four perspectives show how it is done.
1. Use S/4 Hana functionality without changing over
Switching to S/4 Hana is often time-consuming and not feasible in the short run. However, the significantly improved functionality of S/4 Hana offers great benefits. Alegri has developed a method to square the circle: new functionality and a low load on the often thinly spread staff of the customer, so that the ROI is achieved in a short amount of time. One component of this method is the use of S/4 Hana functionality as a booster for the existing ECC 6.0 environment.
That means the improved functionality of S/4 Hana can be set up and used for selected value-adding processes quickly, but the existing business processes in the core system remain unchanged. For example in procurement, that means: In every production system (with one or more ERP, SRM and APO systems, decentralized 3rd party solutions) there are procurement functionalities. These can be optimized by synchronizing the necessary data to a central system on S/4 Hana. There are many benefits in a procurement solution like this, a few examples include:
- Possibility to support processes that require approval with modern interfaces, e.g. with standard Fiori apps for approvals;
- Central shopping cards for office and IT equipment, e.g. PCs, monitors, printers, toners, licenses;
- Fast supply for specialist areas with low handling costs;
- Few, but intensive and cost-optimized supplier relationships;
- Possibility to have warehouses managed by suppliers in the procurement of raw materials and components: Lower inventory risk with faster availability of components;
- Batch size-optimized purchasing and thus cost advantages;
- Inventory overview and thus shortened delivery times;
- Significantly lower handling costs in purchasing;
- Use of SCM functionalities (formerly APO) to optimize processes across plants.
Alegri Procurement Booster Method
In order to use these improved functionalities at short notice, Alegri sets up an S/4 Hana system and connects it to the existing ECC systems. This allows customers to enter the new S/4 Hana world with minimal risk. At the same time, synergy effects are used and the transition to the S/4 Hana environment is carried out step by step. The bidirectional connection of the new S/4-Hana-
Systems allows seamless re-use of existing ECC systems.
In addition, cloud scenarios for the S/4 Hana systems are possible, since the systems do not necessarily have to be operated in the company’s own data center (including a rental model for the licenses, if necessary). Thus, new S/4 Hana functionalities can be tested at low risk and without extensive up-front investment, and optimal operation of global processes can be enabled at optimal cost. The Alegri Procurement Booster Method offers the opportunity to introduce the SAP procurement functionality of S/4 Hana in steps that are compatible with customer- and project requirements.
“Practice shows that many answers to questions about company data often are incomplete and lack comprehensiveness (…)”
2. Data is a gold mine – EIM/Data Services Exchange
Data exchange and information management have become one of the most important disciplines of corporate IT. Departments want agility and flexibility in the use of IT systems for themselves and their customers. Efficient business processes require centralized and high-quality data, data management must not become a “show-stopper”. Companies must therefore establish efficient data handling. Practice shows that many answers to questions about company data often are incomplete and lack comprehensiveness, e.g..: What data is available in the company? Who is responsible for the data? What is the quality of the data? Where is the data used, what are the media breaks? Which data is of value to the company? Which data causes unnecessary costs?
Today more than ever, information governance is a strategic task. Companies operate in a complex technical environment. Information is becoming increasingly valuable and business-critical and must thus be managed professionally. This concerns data efficiency and integration (data architecture and clear responsibility), quality (specifications and processes) and also the management of the information life cycle (specifications and processes). Seeking professional help for the primary setup is recommended.
A first step often is establishing responsibility for information management. Many companies have realized by now that data management is a full-time job and have created the role of Chief Data Officer. The CDO drives the digital transformation in the company, in which processes and roles for the management of data and information are built. The CDO also provides a clear understanding of the data architecture in the company and ensures the company-wide implementation of the defined and coordinated information governance rules.
“The limit of the amount of high-performance and economically manageable data will also eventually be reached with SAP Hana (…)”
3. The (R)Evolution in the SAP world
With new products in PaaS, SaaS and IaaS, SAP’s positioning has become much more diverse in recent years. The client-server principle, in which all data and processes are provided together in as few central systems as possible, is greatly expanded on for the digital transformation. The aim is to decentralize the processes surrounding the centralization of data (“Single Version of Truth”), while business-critical and important data remains in the digital core, the S/4 Hana system.
Most of the operational processes are being moved into web-based applications, both from on-premise sources and XaaS clouds. In addition, new data and processes from the digital transformation have to be integrated into existing and future data- and process structures. IoT data from a wide variety of sources must be transferred quickly, structured and with high quality and integrated as valuable information into your own infrastructure and system landscape.
PaaS with SCP and Leonardo, the SAP platform for digital innovation, is particularly exciting for IT architects. The variety of services offered here opens up many opportunities. Combining and optimizing these services with customer-specific ones and USPs to enhance performance is a form of art – in Industry 4.0, agriculture or sports alike.
Thought further, however, the next challenge arises in the centralized approach to data management. The more dynamic data streams have to be considered in the processes, the faster the volume of data grows. The limit of the amount of high-performance and economically manageable data will also eventually be reached with SAP Hana at some point. You then have to take a close look at the data. Which data is useful and important to the core system?
Edge computing is the keyword here for upstream processing and filtering of data streams and initial quality evaluation. Only what corresponds to well-defined KPIs is passed through for further processing. This approach eases the stress on core systems, infrastructure and administration. It can also improve security and governance and accelerate the evaluation of valuable data. The challenge of Edge Computing lies in defining the KPIs for deciding on data quality and lifecycle management of the Edge components. The change in this (r)evolutionary IT landscape requires visions, experience and long-term master planning! The initial hype is already over, now it is time for consistent planning and implementation.
” (…) in addition to the technical facts, the inclusion of the unique conditions surrounding a company is important.”
4. Cost reduction by benchmarking
The IT innovations at the last DSAG annual congress and Sapphire 2018 promise greatly improved functionalities. However,these come at a price and the IT budget is often limited. It is therefore naturally important to actively optimize the cost side of the equation, e.g. by converting the operating costs into free IT budget for innovations, a fair pricing for IT outsourcing providers – especially in the case of contract extensions or new tenders, and by defending the IT budget against unfounded cuts.
Also, market comparisons and benchmarking are proven methods for identifying potentials for cost reduction. In this context, the Alegri SAP Operating Cost Benchmark differs in breadth and depth from conventional benchmarks on the market because it is based on the experience of over 4500 optimizations carried out for SAP customers. The SAP systems are analyzed in great detail (> 1000 measuring points), taking into account the use, complexity, quality and performance of the current SAP landscape. That also means that a global SAP ERP system is compared only to similar SAP ERP systems. The benchmark is therefore precise and provided hard facts.
The costs are recorded in a proven model that adapts to the organizational structure of the company. In comparison, if you were to just fill predefined Excel tables, the input data would often be incorrectly categorized because, in addition to the technical facts, the inclusion of the unique conditions surrounding a company is important. A global company has different economies of scale than a medium-sized company, a long-term outsourcing contract has different conditions than a three-year contract, a bank has higher security requirements, etc.
The results are assigned to specific SAP application areas in detail (application support, SAP core, hosting, licenses, user administration, etc.), so that cost drivers can be identified and tackled precisely. The focus is on optimization. Thanks to the precise measurement of the SAP systems, the large foundation for comparison and the experienced consultants, the Alegri-SAP Operating Cost Benchmark has established itself and is recognized throughout the community. In recent years, it has been possible to reduce the operating costs of every customer by more than 20 percent on average while keeping system performance stable.